In the evolving digital landscape, enterprise IT departments are finding cybersecurity to be an indispensable shield, safeguarding innovation. Many organizations have separated their cybersecurity responsibilities from IT departments, so that the IT team can focus on technical support without being overwhelmed. However, cybersecurity and IT audit are two sides of the same coin. While cybersecurity serves as the daily line of defense, IT audit represents a more predictable deployment strategy. Previously, IT audits may have been a component of the internal control audit, conducted by the internal audit department. Recognizing the growing significance of IT audits in today’s digital landscape, an increasing number of audit professionals are advocating for the implementation of independent IT audits as a separate audit program. IT audits not only ensure unbiased results but also help organizations uphold credible practices and processes and acquire the necessary tools to adhere to compliance bodies such as the National Institute of Standards and Technology (NIST) and standards such as the International Organization for Standardization (ISO) 27001.
Cybersecurity and IT audit are two sides of the same coin. While cybersecurity serves as the daily line of defense, IT audit represents a more predictable deployment strategy.
In the past, cybersecurity, IT, and IT audit were separate departments, especially in large enterprises, banks, and insurance companies with greater financial resources. Boards of directors (BoDs) are now attaching great importance to IT auditing, due to several factors:
- The significance of internal control is increasing, particularly for enterprises that answer to shareholders.
- The reputations of enterprises have been directly impacted by reports of attacks on private and public organizations in recent years, which could lead to the loss of customer trust built over time.
- Given that the cost of an audit could be a mere fraction—as little as one-twentieth—of the cost incurred in rebuilding and compensating for losses post-attack, the business community perceives it as a prudent investment.
A forward-thinking board of directors can reduce enterprise risks by improving IT audit practices while also preserving the organization's reputation. Moreover, a sustainable business thrives in the long term with a reasonable budget aligned to operational efficiency rather than haphazard cost-cutting. It is more beneficial to safeguard the business with reduced operating costs rather than investing extra funds in disaster recovery.
The Future of IT Audit and Organizations
In the face of increasingly sophisticated cybersecurity threats, a comprehensive evaluation of an organization’s defensive capabilities is crucial. Relying solely on the internal IT department's report may not suffice to determine the enterprise’s ability to defend itself against cybersecurity threats. Self-auditing may not be the most effective way to assess the organization’s cybersecurity posture due to the presence of blind spots.
An independent IT audit ensures unbiased results and credible practices and processes from the auditing entity. Equipped with the necessary tools, the auditor adheres to national or global compliance methods, thereby providing a comprehensive and reliable assessment of an organization’s cybersecurity posture. Moreover, they shed light on potential risk, thus empowering the BoD with a holistic understanding of the situation at hand.
A thorough assessment of the organization's current state is essential for an IT audit. However, conflicting roles and responsibilities within the internal IT and audit departments can make it challenging to deliver a complete and unbiased report to the board of directors. Yet, providing objective and comprehensive information is crucial for informed decision making by the board. Therefore, an independent IT audit not only allows the board to understand the true condition of the enterprise but also provides a foundation for sound decision making.
Actions Speak Louder Than Words
It is an undeniable fact that every enterprise carries potential risk, without exception. An independent IT audit marks the start of the risk management process, making it a crucial first step. The board of directors needs to be receptive to the findings presented by the independent IT audit and recognize that the organization is either currently confronting or may face potential risk to effectively respond to various types of risk.
Fortunately, there are many ways to deal with risk, such as reducing it, transferring it, or even accepting it. For example, enterprises can choose to purchase additional security solutions to reduce risk, purchase cyberinsurance to transfer risk, or prepare for risk by utilizing a playbook, so that they can withstand risk when it occurs.
With the board's understanding of the objectivity of an independent IT audit, it also recognizes that an independent IT audit provides an important stepping stone in decision making. In recent years, there has been an increasing number of small and medium-sized listed companies' boards of directors elevating the IT audit to an independent and regular annual session. Being transparent about the risk your organization faces is crucial. The board of directors serves as a beacon for the organization, so it is vital to grasp both known and potential risk to proactively prepare for them.
In short, an independent IT audit is no longer optional but a crucial strategy for businesses in today's cybersecurity landscape. Not only does it enable the board to make informed decisions, but it also helps avoid significant losses that can result from exposing an organization to risk. To begin the process of implementing an independent IT audit in your organization, the organization’s BoD must take immediate action to review whether the existing IT audit is sufficiently objective and independent. The independent IT audit should then be included in the regular annual audit and used as an important reference for decision making.
Yuman Chau
Is an ISO27001 senior lead auditor and associate director in risk advisory.